SORTA wants to limit transit fund, Mallory refuses

In the past few days, local media outlets have reported
heavily on a supposed conflict between Southwest Ohio Regional Transit
Authority (SORTA) and the city of Cincinnati. Essentially, SORTA wants
the transit fund limited, while the city government says it doesn’t want
to “undermine the city charter” with limitations.

At its heart, the argument is a political back-and-forth
with little consequence. It’s two government agencies at a small divide
over legalese in an intergovernmental agreement about how the streetcar
will operate and how it will be funded.

The specific issue is SORTA, which runs the Metro bus
system and will operate the streetcar, wants to include phrasing in its
agreement with the city that makes it so the transit fund can’t be used
for the streetcar. In a 7-6 vote Tuesday, SORTA's board pushed its preferred wording along with an application for an $11 million federal grant that will help fund the streetcar.

But the city government claims the limitation would go
against the spirit of the city charter, which says the transit fund can
be used for “public transit purposes generally and without limitation.”

UPDATE:City Council on Wednesday
passed a resolution promising not to use Metro bus money on the
streetcar, although it has no legal standing preventing council
from later coming back and using transit funds for the streetcar.

Still, Mayor Mark Mallory’s office has insisted time and
time again that funding for the streetcar’s construction and operation is already
allocated, so taking any money from the transit fund will be
unnecessary. Specifically, the city will tap into casino revenue to
operate the streetcar, on top of the $11 million federal grant.

In an op-ed for The Cincinnati Enquirer Monday, Mallory said
the real issue goes back to an ongoing lawsuit between SORTA and the
city. In 2010, the city diverted money from the transit fund to
pay for street lights. That prompted a lawsuit from SORTA, asking the courts to
define the limits of the transit fund.

The mayor’s office sees the wording from SORTA as an attempt from the transit agency to score a minor victory in the legal battle. If the city government accepted the wording, it
would be agreeing to a limited transit fund, which is essentially what
SORTA wants.

SORTA’s wording also makes it so all transit fund money
will continue going to the Metro bus system, which is the agency’s sole
service today.

But even SORTA says the disagreement is getting blown out of proportion by media outlets and public
officials. Sallie Hilvers, spokesperson for SORTA, says the wording in the approved agreement was the board’s attempt to ensure the transit fund
isn’t used for the streetcar, but, for the most part, it’s “really just
procedures.”

Hilvers insisted the disagreement over wording has plenty
of time to be worked out, and it will not hinder collaboration between
the city of Cincinnati and SORTA.

The agreement will need to be worked out before summer 2013 for the streetcar to stay on track.

Only $7.5-$24.5 million left after fully shutting down project, paying back feds

Streetcar Project Executive John Deatrick on Thursday
revealed that the city might only keep $7.5-$24.5 million if it cancels
the $132.8 million streetcar project.

That means the city could potentially spend more than 94
percent of the project’s total costs before it manages to fully close
down the streetcar project, which is currently undergoing construction
and tied up to various federal grants and business contracts.

The presentation was given in advance of Mayor-elect John
Cranley and the newly elected City Council taking office in December.
Cranley is an ardent opponent of the streetcar project, and a majority
of the City Council says it wants to pause the project and consider
cancellation.

Cranley’s proposed alternative to the streetcar — a trolley bus system
— would cost $10-$15 million in capital funds, according to supporters of the rubber-tire trolley alternative.If streetcar cancellation costs were to reach the high end of the city’s estimate and the trolley bus is paid for, the city could end up spending $140.3 million to cancel the streetcar project and build a
considerably less ambitious trolley bus line — about $7.5 million more
than it would cost to simply complete the streetcar project.

If it’s completed, Cincinnati Budget Director Lea Eriksen says operating the streetcar would cost between $3.4-$4.5 million each year, which city officials say could come from various potential sources, including a special improvement district that would raise property taxes within three blocks of the streetcar route.

Following Deatrick’s presentation, Cranley held a press conference in which he flatly denied the current city administration’s estimates. He says he will tap new experts to run over the numbers while the project is put on pause.

“We’re going to bring in new, objective leadership, not the current leadership that is clearly biased toward the project and intent on defying the will of the voters, which was clearly expressed a couple weeks ago in this election,” Cranley says.

Deatrick’s cancellation projections account for $32.8 million in estimated sunk costs through November and a potential range of $30.6-$47.6 million in close-out costs, which include
construction to close the project — such as
repaving torn-up roads — and orders on vehicles and other
supplies that are already placed but not officially billed.

The federal government has also allocated $44.9 million in
federal grants to the streetcar project. In a letter released by the
city administration on Nov. 14, the Federal Transit Administration (FTA)
explicitly stated that $40.9 million would be taken back if the project
didn’t adequately progress; the remaining $4 million would be left
under the supervision of Gov. John Kasich, who could shift the money to
other parts of the state.

But Deatrick’s estimates don’t consider the unknown cost
of litigation, which would need to come out of a city operating budget that is already structurally imbalanced,
according to Meg Olberding, the city’s spokesperson.

The estimates also don’t consider that the city could
potentially forgo spending $7.4 million in contingency funds on the
project if it goes through completion and remains within budget, which
would lower the project’s effective cost to $125.4 million.

If the city cancels the project, Deatrick says it’s also
more likely that the city would lose in its legal battle against Duke
Energy, which could add up to $15 million in costs. That money is
tentatively allocated from the sale of the Blue Ash Airport as the city
and Duke argue in court as to who has to pay for moving utility lines to
accommodate for the streetcar tracks.

Those are the potential financial costs, but city
officials also warn that canceling the project could have a detrimental
impact on the city’s image.

“That’s what the city would be known for forever,” says
Councilwoman Laure Quinlivan. “To throw this away would be
unconscionable.”

City officials also warn that canceling would be pulling
back on a light rail project that President Barack Obama’s
administration has clearly prioritized.

“The city-federal relationship is excellent right now,” Deatrick says. “There would be immediate damage to that.”

The 200-plus workers currently involved the project would
also be displaced. Councilwoman Yvette Simpson points out pausing or
canceling the project in December would leave those workers jobless for
the holiday season.

Another concern is the impact of cancellation on the
relationship between the federal government and Southwest Ohio Regional
Transit Authority (SORTA), which operates the Metro bus system and will
operate the streetcar if it’s completed. If the city is unable to pay back
the grants to the federal government within 30 days, Deatrick says
the FTA could cut SORTA grants for bus service and potentially halt some
local bus services.

One concern raised by Councilman Chris Seelbach and
Councilman-elect Kevin Flynn, one of the three potential swing votes in
the incoming council of nine, is whether the project’s estimated return on
investment is still 2.7-to-1 over 35 years. That number is derived from a
2007 study conducted by consulting firm HDR, which was later evaluated
and affirmed by the University of Cincinnati.

Deatrick points out the numbers were re-evaluated by HDR
in 2011, and they still seem to hold true. He says there are still
plenty of vacant buildings along the 3.6-mile streetcar line that could use the encouraged investment, despite
some of the revitalization seen in the Over-the-Rhine and downtown areas
that the streetcar route would cover.

The 2.7-to-1 return on investment is also “a very, very
conservative estimate,” says Deatrick. He claims HDR could have relied
on numbers from other cities, such as Portland, Ore., that saw
considerably better returns on their streetcar systems.

Still, Flynn and Councilman-elect David Mann, another
potential swing vote, say they want to scrutinize the cancellation
estimates before making a final decision on the project.

Vice Mayor Roxanne Qualls, a long-time streetcar supporter
who lost to Cranley in her mayoral bid, encourages a re-examination of
the numbers. But she cautions, “If what has been presented today stands up to scrutiny,
there’s absolutely no reason to cancel the project.”

Flynn won’t say whether he would reconsider his past
opposition to the project if the numbers hold up. But Mann says, “If
they do hold up, that’s fairly persuasive.”

Both Flynn and Mann also say that they would be willing to pause the project while clearer estimates are crunched.

But that could present a short time window. If the project
doesn’t adequately progress, the federal government could take back its
grant money. Based on city officials’ estimates, that provides a 30-day
window to re-calculate cancellation costs and the potential return on investment.

Pausing the project would also impose its own set of costs as some workers and equipment are retained.

Councilman P.G. Sittenfeld, who’s also seen as a swing
vote, could not be reached for comment. He’s currently in Washington,
D.C., to meet with White House officials for an issue unrelated to the
streetcar.

Three elected council members already support the streetcar project, so only two of the three potential swing votes would need to vote in favor of it to keep it going.

Updated with Mayor-elect John Cranley’s comments and clearer, corrected numbers.

City chooses vehicle models and vendor

Mayor Mark Mallory last
night announced during his State of the City address that the city
has chosen the model and vendor for the first batch of streetcars.

The mayor's office today released details about the vendor, along with renderings of the streetcars Cincinnatians can expect to see traversing the 4-mile
loop that will cover 18 stops connecting The Banks, Government Square, Fountain
Square, Broadway Commons, the Gateway Quarter and Music Hall.

According to the release,
the vendor, CAF USA, has produced light rail vehicles for Pittsburgh,
Sacramento and Houston and streetcar vehicles for the international
cities such as Besançon and Nantes, France; Belgrade, Serbia;
Antalya, Turkey; Stockholm, Sweden; Edinburgh, Scotland; and Spanish
cities Zaragoza, Granada, Sevilla, Bilbao and Vitoria.

Officials
in February broke ground the Cincinnati Streetcar system, and the city hopes to add
additional phases connecting the Uptown area near the University of
Cincinnati once funding is secured.

Clarification necessary as mayor-elect discusses canceling project

Although it has already been explicitly stated in two
letters from the federal government, Federal Transit Administration
(FTA) Chief Counsel Dorval Carter on Monday reiterated that if Cincinnati were to unravel the
$132.8 million streetcar project, the city would lose $40.9 million in federal grants and another $4 million in federal funds would be
transferred to the state government, which could appropriate the money
to any project in Ohio.

The clarification is necessary because Mayor-elect John
Cranley and a majority of the incoming City Council are looking into
pausing and potentially canceling the streetcar project once they take office in December. Cranley says he
will lobby the federal government to reallocate the federal funds, even
though the federal government has repeatedly insisted it’s not
going to happen.

Carter joined City Council’s Budget and Finance Committee on the phone on Monday to walk council members through the legal
technicalities involved in cancellation and how the federal government
would react to such circumstances.

According to Carter, merely delaying the project at this point would
break the city’s agreement with the federal government and
lead the federal government to restrict the federal funds,
ask the city to repay the money it already spent or terminate the
deal altogether.

Still, Carter said cancellation might not hurt the city’s chances, at least from a legal perspective, of obtaining federal funds for other projects.

“It will not preclude you from pursuing other projects,” he said. “You would just have to pursue those on their own merits.”

But Carter agreed with Vice Mayor Roxanne Qualls that
the city’s credibility could be weakened if the streetcar project were
canceled.

President Barack Obama’s administration has prioritized light rail projects like the streetcar, according to Carter, so the reclaimed federal moneywould likely go to other cities pursuing similarly ambitious transit projects.

At a press conference following the council meeting, Cranley appeared unfazed by the news.

“If we have to, we’ll give the money back,” he said.

Although much noise was made about the council meeting, there wasn’t much news in the way of substance. The federal government already outlined the cancellation costs in separate letters sent to Mayor Mark Mallory in June and earlier in November.

Cincinnati commuters spent an extra 37 hours on road due to traffic

Traffic can be awful — not just for drivers, but economies
and the environment as well. A study released Tuesday by the Texas A&M Institute
of Transportation found Cincinnati lost about $947 million in 2011 to delays on the road, coming in at No. 27 nationwide.

The Annual Urban Mobility Report also ranked Cincinnati No. 37 nationwide for extra time stuck in traffic, with the average Cincinnati commuter
spending an extra 37 hours on the road in 2011.
In comparison, the average
Columbus commuter spent 40 extra hours in traffic in 2011, and the typical Cleveland commuter spent 31 extra hours. For all three cities, estimates were unchanged from 2010.

Traffic jams also have a major impact on climate change. According to the report, congestion caused cars to produce an extra
56 billion pounds of carbon dioxide nationwide, with Cincinnati commuters producing 421
million pounds.

The report shows why it’s important for governments to
reduce traffic congestion with transit projects like the Cincinnati streetcar. In general, public transportation leads to
less congestion by taking cars off the road as people use buses, streetcars and trains instead. But some cities have taken it even further. By adopting exclusive lanes for buses and
streetcars, cities like San Francisco have made public transportation more attractive, which makes people more likely to forsake
their own cars in favor of public alternatives.

Conservative group involved in two lawsuits related to streetcar, CPS levy

A local conservative group is making a lot of use of member and
lawyer Chris Finney. The Coalition Opposed to Additional Spending and
Taxes (COAST) was involved in two lawsuits filed this week: one regarding the Blue Ash Airport deal and another regarding Cincinnati
Public Schools (CPS).

Criticism of the Blue Ash Airport deal is not new for
COAST. The group has repeatedly criticized the deal, largely because as
much as $26 million from the deal will be used to fund Cincinnati’s $110
million streetcar. In the past, COAST has repeatedly characterized the streetcar
as a “boondoggle.”

The deal between Blue Ash and Cincinnati is not new, but
it did get reworked earlier this year. In 2006, the $37.5 million deal
had Cincinnati selling Blue Ash some land on the Blue Ash Airport
property, which Blue Ash would then use to build a park. Blue Ash voters
approved the deal, which contained a 0.25 percent earnings tax hike, in
a two-to-one margin.

When Cincinnati couldn’t get a $10 million grant from the
Federal Aviation Administration (FAA), the city stopped working on the
airport as it became too costly. The city then tried to shift the
proceeds from the deal to the Cincinnati streetcar, but the FAA said
funding must be used for airports since the property is classified as an
airport.

Eventually, Cincinnati asked Blue Ash to rework the deal.
The plan was Blue Ash would rescind the deal, and then Cincinnati would
officially close down the airport and resell the land to Blue Ash while
it’s no longer classified as an airport.

At first, city officials said $11 million of the opened-up
money would go to the streetcar and $26 million would go to municipal
projects. Since then, the city has shifted $15 million of that municipal
project funding — supposedly temporarily — to help Duke Energy move
underground utility lines from the path of the proposed streetcar route,
at least until the city and energy company can work out an ongoing
feud.

The reworked deal, which was approved by
Blue Ash City Council in a 6-1 vote on Aug. 9, seemed like a win-win for
both sides. Cincinnati would get more funding for ongoing projects,
and Blue Ash netted $2.25 million from the deal — $250,000 to cover fees
for Blue Ash’s new park and $2 million was subtracted from the deal
since Blue Ash would no longer have to match the FAA grant.

But COAST does not approve. The organization doesn’t want
any funding redirected to the streetcar, and it claims the reworked deal
is not allowed. The lawsuit filed by Blue Ash resident Jeffrey Capell
and Finney cites a section of the Blue Ash City Charter that disallows
some contracts: “No contract shall be made for a term longer than five
years, except that franchises for public utility services and contracts
with other governmental units for service to be received or given may be
made for any period no longer than twenty years.”

Mark Vander Laan, Blue Ash’s city solicitor, says the
city charter section the lawsuit is referencing is irrelevant. He argues the deal is
not a contract as the city charter defines it; instead, it’s a mortgage and debt
instrument. In the Blue Ash City Charter, there’s another section that
deals with debt instruments, and that’s what the rescinded deal falls
under, according to Vander Laan. He says the city would not function as
it does today if the lawsuit’s claim was correct: “If that were the
case, all the bonds we’ve ever issued would have been incorrect.”

Vander Laan says the real issue here is disapproval of the
streetcar, not any legal technicalities: “They may have a complaint
about the streetcar, but that’s not the city of Blue Ash’s issue at all.
We don’t think it’s even an appropriate basis to challenge this.”

He added, “Frankly, if somebody had an issue with (the
deal), they should have taken that issue back in 2006 and 2007.” That’s
when Blue Ash voters first approved the airport deal, but back then, the
money wasn’t going to the streetcar, which didn’t even exist at the
time.

In another legal battle, COAST filed a lawsuit against CPS
over staff allegedly campaigning for Issue 42, a ballot initiative that will
renew a CPS levy voters approved in 2008. The case goes back to 2002, when Tom Brinkman, chairman
of COAST, sued CPS for “illegal and unconstitutional use of school
property for campaign purposes,” according to the lawsuit. That case
ended in a settlement, which forced CPS to enter into a “COAST Agreement” that says, “CPS will strictly enforce a policy of preventing … Other
Political Advertisements on CPS Property.”

But COAST now says that agreement has been broken, and the
lawsuit cites emails as evidence. The emails show staff promoting voter
registration drives, which aren’t directly linked to Issue 42, and
staff offering to contribute and volunteer to the campaign. In the
emails, there are a few instances of Jens Sutmoller, Issue 42’s campaign
coordinator, asking CPS staff to give him personal emails, which shows
he was trying to avoid breaking any rules.

In CityBeat’s experience, CPS officials have been
pretty strict with following the settlement with COAST. In a Sept. 20
email, Janet Walsh, spokesperson for CPS, told CityBeat she could
not provide some levy-related information during work hours: “Yes, but
due to constraints about doing levy-related work on work time (we
can't), it may have to wait until I can get on my home computer.”

COAST has endorsed a “No” vote on Issue 42. In CityBeat’s
in-depth look into CPS and Issue 42 (“Battered But Not Broken,” issue
of Oct. 3), Brinkman defended COAST’s position by saying they’re not
necessarily against the school getting funding. COAST is more
interested in holding the school accountable: “It’s a five-year levy.
The reason we have five-year levies is so the public can gauge after
four or four and a half years how the entity where the taxes are going
to is doing with the money.” In that sense, for COAST, it’s important to
bring the levy renewal to voters as late in the game as possible —
November 2013 in this case. CityBeat this week endorsed a "Yes" vote on Issue 42 here.

Criticism of CPS levies is
also not new for COAST. The group campaigned against last year’s new, permanent $49.5 million
levy, which CPS said it needed to meet new technology needs and keep
some buildings open.

As part of its slate of endorsements announced today, the Cincinnati U.S.A. Regional Chamber of Commerce stated it's opposed to Issue 48, the proposed charter amendment that would block construction of Cincinnati's planned streetcar system.

City Council committee passes measure allowing “double dipping”

City Council’s Budget and Finance Committee moved forward
with two controversial measures in two 5-4 votes today that will allow the
city to rehire retirees while still paying their pensions and create an
executive project director position for the streetcar project.

One of the measures repeals the city’s ban on “double dipping,”
which means rehired retirees will be able to
simultaneously cash in a salary and pension payments. The measures will allow the city to hire John Deatrick, the
current project manager for The Banks, to head the streetcar project.
The city could not previously hire Deatrick because he formally retired
from the city and is currently receiving pension payments.

The city says Deatrick has the experience and expertise
necessary to help bring the streetcar project’s costs in line, but
critics say the city should not be hiring someone for the streetcar
project when the city is considering laying off 344 employees, including
189 cops and 80 firefighters, to balance the budget.

Deatrick says the layoffs are unfortunate, but he
emphasizes that they are occurring through the general fund. If he was
hired, Deatrick’s salary would be paid through the capital budget, a
completely separate fund that the city uses for major development
projects. Because of legal and traditional constraints, capital budget funds generally can’t be used to balance the general fund.

Deatrick’s point is similar to an argument often touted by City Manager Milton
Dohoney Jr., who says the city needs to economically grow out of structural budget
deficits. Dohoney and other city officials say the true cause of Cincinnati’s
structural budget imbalance has been the city’s dwindling population in
the past decade, and bringing people back to Cincinnati through economic
development projects, including the streetcar, is a better approach than austerity that would cause more
layoffs and economic pain.

Others, particularly Democratic mayoral candidate John
Cranley, aren’t convinced. In a press statement that used vocabulary that often comes from streetcar opponent COAST (Coalition Opposed to
Additional Spending and Taxes), Cranley said, “Since day one the
streetcar has been a poorly conceived, poorly managed boondoggle that is
now costing the city even more money. The fact that this being done
while police officers and firefighters are facing layoffs is a slap in
the face of those who risk so much to make sure that our city is safe.”

But the city says Deatrick’s involvement could help bring
the streetcar project’s costs down, and Deatrick seems to agree.

“That’s
been my whole ‘shtick,’ ” Deatrick says, before citing numerous aspects
of the streetcar project he would be interested in looking at to
bring costs in line.

Opponents have pointed to the streetcar’s multiple problems, including unexpected costs and delays, as proof the project has been doomed from the start. But Deatrick says it’s normal for big projects to deal with hurdles, and he cautions he would expect to deal with more rising problems if he takes the job.

“Any time you try to build something — even out in the
middle of a corn field — you’re going to have unexpected, unanticipated
issues,” he says. “These things happen, and that’s what project
management is all about.”

Deatrick says he has long supported the streetcar, and he
plans to expand the project up to the University of Cincinnati and the
rest of the uptown area if he’s put in charge.

While Deatrick has discussed heading the streetcar project with
city officials, no formal offers have been made yet. Still, City Council members
and Dohoney repeatedly named Deatrick as a potential candidate in the
special session of City Council today.

Some council members said they were concerned the double-dipping measure will be
used for more similar hires in the future, which could raise
hiring costs as the city pays for multiple employees’ salaries and
pensions at the same time.

Deatrick’s resume shows experience going back decades.
Since June 2008, Deatrick has headed The Banks project, which recently
won the American Planning Association’s 2013 National Planning
Excellence Award for Implementation (“Bank On It,” issue of Jan. 16).

Before that, he worked as deputy director and chief
engineer at the District of Columbia Department of Transportation from
May 2002 to August 2007, where he says he helped manage parts of the
D.C. streetcar, among other projects.

Prior to his work at D.C., Deatrick started his career as an urban development
technician at Cincinnati’s Department of Transportation and Engineering on September 1973. He helped with many projects around the city before eventually rising to the director position in
November 1999, where he remained until May 2002.

The streetcar is one of the few issues dividing Democratic
mayoral candidates Cranley and Qualls, making the 2013 mayoral race
another important election for the future of the project (“Back on the Ballot,” issue of Jan. 23).

Streetcar opponents allow Sittenfeld to act like a leader in everyone’s face

By all accounts, yesterday’s special council session to
discuss the Cincinnati streetcar was long and contentious, more than 60 streetcar supporters
pleading with an indignant Mayor John Cranley and newly elected council members
still spouting campaign-trail anti-streetcar rhetoric.

After the meeting, Cranley dismissed an offer by major philanthropy organization The Carol
Ann and Ralph V. Haile, Jr./U.S. Bank Foundation to pay for a study of
streetcar shut-down costs that opponents want to see come in lower than the
city’s estimates before they vote to completely stop the project. Cranley dismissed
the offer because it also came with a note saying that if the streetcar is canceled the foundation will
reconsider its contributions to Music
Hall, the Smale Riverfront Park and other city projects. Cranley would rather make the city pay for the study than negotiate with terrorists respond to threats.

About seven and a half hours into this debacle of American
democracy — which included numerous procedural abnormalities including the
mayor asking Council to discuss and vote on ordinances no one had read yet, an hours-long
delay and a funding appropriation that leaves the cancellation vote safe from
the pro-streetcar-threatened voter referendum (something Cranley railed against
when the city administration kept the parking plan safe from referendum) — Councilman
P.G. Sittenfeld livened things up with something everyone tired of the streetcar
debate can agree is funny: undermining the mayor’s authority by asking fellow
council members to overrule him.

The following video published by UrbanCincy shows Cranley denying Sittenfeld an opportunity to speak. Sittenfeld then asks for a vote to overrule Cranley, which the mayor had to approve, and everyone but Kevin Flynn votes to overrule. (Flynn unfortunately had to vote first, leaving him unable to determine which way the vote was likely to go — a tough position for a rookie politician.) Once David Mann and Amy Murray voted to allow Sittenfeld to speak, the rest of the anti-streetcar faction followed suit, knowing Sittenfeld had the necessary votes to overrule Cranley. Then Sittenfeld spent a few minutes going mayoral on Cincinnati's new mayor.

City officials on Wednesday reasserted that it remains
unknown how much it would cost to cancel the $133 million streetcar
project, and city spokesperson Meg Olberding and project
executive John Deatrick agreed the unknown costs are a big concern.

Voters on Tuesday elected John Cranley to the mayor’s office
and six council members — out of nine total — who oppose the streetcar
project, giving streetcar opponents enough votes to cancel the project
once the new government takes power on Dec. 1.

But, as first reported by CityBeat on Oct. 9,
cancellation could carry all sorts of costs with $94 million tied to
contractual obligations, including supply orders and other expenses
from contractors and subcontractors, and $23 million already
sunk on the project.

If the city were to cancel, it would also need to return
nearly $41 million in grants to the federal government, according to a
June 19 letter from the U.S. Department of Transportation.

Canceling the project would cost jobs as well. About 150
laborers are currently working on the project, according to Deatrick. He
says there’s also management positions involved, but he couldn’t offer
an estimate for those jobs and whether they’re working on the project
full- or part-time.

Deatrick says that it’s difficult to pin down how much
cancellation would ultimately cost because the issue would likely
be worked through litigation as the city tries to minimize cancellation
costs and developers — such as Messer Construction, Prus Construction,
Delta Railroad and CAF USA — attempt to maximize what they recoup from the
project.

Another concern, according to Olberding, is cancellation’s impact on the operating budget. She says the roughly
$2 million in federal grant money already spent on the project would have
to come out of the operating budget, and litigation costs would come from the operating budget as well.

The capital budget, which is financed through bonds and
other forms of debt, pays for capital projects like the streetcar. The
operating budget typically goes toward day-to-day operations, including
police, firefighters and human services.

The operating budget has been structurally imbalanced
since 2001. If millions in litigation costs and repayments to the
federal government are added to it, the city could be forced to cut services and jobs or raise taxes.

There are also concerns about how the federal government and
Cincinnati’s business partners would react to the cancellation of such a
major project. Vice Mayor Roxanne Qualls, Cranley’s opponent in the
mayoral race, previously told CityBeat that pulling back on a
commitment could break the faith developers and the feds placed in
Cincinnati when they agreed to take on the streetcar project.

Cranley and other anti-streetcar elects argue the long-term costs — the $88 million in the capital budget for the current
phase of the project, the cost of future expansion and $3-4 million that
it would cost to operate the streetcar annually — outweigh even the
costs of cancellation.

Cranley previously told CityBeat that he would help developers involved in the project find other work in the
city to recoup the revenue lost from the project’s cancellation. He says
Messer and Prus in particular are based in and already work heavily in
Cincinnati, so it’s unlikely they would try to cut ties with the city.

Streetcar supporters aren’t convinced. If the city pulls out of such a
big commitment, officials argue both the federal government and
developers could be compelled to look for a more reliable source for
future work.

Meanwhile, Deatrick says current construction work is
progressing on time and within budget. He expects the track on Elm Street to
be laid down between 12th and Henry streets by the end of the year.

As for the next phase of the project, Deatrick says
there’s still no estimated cost. He attributes much of the project’s current
political problems to construction bids coming in over budget earlier in
the year — a turn of events that led City Council to put another $17.5
million to the streetcar project — so he says the city needs to be
really careful with future estimates if it decides to expand the
streetcar system.

Despite the fresh political threats, the city still
intends to conduct meetings with businesses on Nov. 14 and 18 about the
benefits of the streetcar. Deatrick says those meetings should show the
economic benefits of the rail line that go beyond the streetcar’s use as
a transit network.

Supporters of the streetcar often point to those benefits as
their reasoning for backing the project. Citing a 2007 study from
consulting firm HDR that was later evaluated and supported by the
University of Cincinnati, supporters say the streetcar project would produce a three-to-one return on investment.

Deatrick acknowledges those projections are now outdated,
given all the changes the project has gone through since 2007. He says
the city has people working on updating the numbers and looking at
other economic effects the HDR study may have missed.

But opponents of the streetcar project say it’s simply too
expensive and the wrong priority for Cincinnati. Still, the potentially
high cost of cancellation could prove a bigger fiscal concern.

Either way, Cincinnati should find out the full consequences to the project in December.